LA GUAIRA, Venezuela—Since the start of this year, the U.S. was preparing to reap the benefits of its unlikely alliance with Venezuela as the world’s biggest oil reserves and vast mineral deposits opened up to American investors.
Now, the Trump administration is facing a daunting multibillion-dollar cleanup after twin earthquakes last month tore open roads, downed power lines and flattened buildings.
Venezuelans are looking for help from a U.S. administration that says it is running the country.
“We’re in the hands of God, as well as the Americans,” said Danny Muñoz, a bricklayer who pulled the lifeless body of his pregnant stepdaughter out from underneath debris after their apartment building along the coast here collapsed. “No one else can save us now.”
The United Nations says the damage to the infrastructure is about $37 billion, equivalent to roughly a third of Venezuela’s annual economic output. Rubble needs to be cleared, bodies recovered and new homes built for thousands of people sleeping in baseball stadiums and on the street. Researchers from Oregon State University estimate 69,000 buildings were damaged or destroyed in Venezuela’s beachside communities like those in Catia La Mar, a 45-minute drive from Caracas in the devastated coastal state of La Guaira.
Acting President Delcy Rodríguez has already faced a backlash over her government’s search-and-rescue efforts. Failure to rebuild risks more unrest, creating a challenge not only for her hold on power but also for a U.S. administration that sees Rodríguez as vital to its plans for stabilizing Venezuela.
The Trump administration has exerted a strong grip over Rodríguez and her government since American commandos captured the country’s former leader, Nicolás Maduro, in January. The U.S. says it now controls Venezuela’s billions of dollars in oil revenues and state finances, putting Washington at the center of any reconstruction efforts.
Secretary of State Marco Rubio pledged a “whole of government response” after the June 24 earthquakes killed more than 5,000 people. American soldiers have surveyed damage, overseen airport repairs and delivered aid supplies.
In less than a month, the State Department says it has provided $386 million in postquake assistance, more than the U.S. delivered to other countries hammered by recent quakes, even after Washington dismantled its main foreign-aid agency last year. In a July 8 statement, the State Department said it is planning reconstruction efforts with Venezuelan officials that “must be swift, safe and risk-informed to support long-term recovery.”
Ángel Cárdenas, an infrastructure specialist at Latin American development bank CAF, said building homes for the some 26,000 people left on the street should be a priority.
“If you fail to deal with the infrastructure, you could later face security, governance and sanitation problems,” he said during a virtual event with the Atlantic Council, the Washington think tank.
In Playa Grande, the temblors spared few buildings. They took down beachside residential towers where wealthier Venezuelans from the nearby capital, Caracas, escaped for weekend getaways, and cheaply constructed low-income high-rises where Styrofoam was used as filler between cement slabs.
In one seaside community, graffiti outside a collapsed building asked authorities not to demolish it until the families could recover nine bodies buried under the rubble.
Willian Romero, a mechanic, recalls developers telling him his new home was earthquake-proof when he moved here 14 years ago, into a state housing project named after Hugo Chávez, the late socialist leader who had them built.
Flush with oil money, Chávez’s government built millions of homes for the country’s poor, locking in voter support. Rigid price controls helped flood local markets with cheap rebar and cement that stoked a construction boom. Chávez, a staunch opponent of Washington, gave building contracts for his Gran Misión Vivienda project to companies from U.S. adversaries such as Iran, China and Belarus.
Chávez once held up Romero’s apartment complex as a symbol of the power of his socialist revolution.
But the cluster of blue-paneled, four-story apartment buildings—constructed by a Turkish contractor—quickly crumbled into piles of twisted metal and plywood when the earthquakes rocked Venezuela’s northern coast.
It was the second natural disaster that Romero’s family had survived, after their home was destroyed in deadly mudslides in 1999 that wiped out the same coastal communities.
“I’m back to zero,” said Romero, whose wife and children were pulled out alive from under the rubble and now all live in roadside tents. “Let’s see where the government sends us now.”
Today, Venezuela’s government has little shot of rebuilding on its own after a decadelong economic depression left it bankrupt.
Rodríguez has used the earthquake crisis to amplify her calls for Washington to further loosen sanctions on her country and reopen access to government accounts held overseas, including gold bullion that Venezuela has sitting at the Bank of England. Calixto Ortega Sánchez, Rodríguez’s top economic adviser, said Monday that the costs of the quake will weigh on the interim government’s plans to restructure its approximately $200 billion debt load.
The U.S. could play an important role in overseeing technical studies to determine what caused some buildings to collapse, a necessary step to prevent future calamities when rebuilding, said Alejandro Linayo, a Venezuelan engineer and specialist in natural disasters.
Many buildings were built on loose, soft sediment that amplifies shaking during tremors, Linayo said. Others were vulnerable because of shoddy construction amid rampant corruption that undermined an otherwise-strong building code.
“You have to question if they were really doing things properly,” said Linayo, who worked on a Japanese-funded project during Chávez’s government that studied how to reduce damage from natural disasters.
For many here, losing homes means losing all of their savings. There is little hope of recovering wealth in a country where mortgages and housing insurance are virtually nonexistent thanks to the spectacular demise of the national currency, the bolivar, and years of hyperinflation.
“One of the most common hedges was to ‘save in cement,’ parking savings in the only inflation-proof asset within reach: cement, blocks and steel,” said Juan Barrios, an economist who led the Inter-American Development Bank’s Venezuela analysis when the country was falling into economic misery.
Humberto Garcia, a 57-year-old accountant, paid about $5,000 to buy his 860-square-foot apartment at the Chávez project six years ago. For a while, he said, it was good living, with security from nearby military installations, working power service and internet that was decent enough for him to hold a remote job online.
The buildings were sold as ready for earthquakes, but he said Venezuela’s economic challenges meant residents didn’t have money for upkeep. Water leaks went unattended, damaging the structures and likely contributing to their demise during the quakes.
Now, Garcia is camped out near his destroyed apartment building. He said he hoped the disaster would serve as a turning point for how the government manages housing regulation.
“What I hope is that this tragedy gives us a chance to change,” he said.
Write to Kejal Vyas at kejal.vyas@wsj.com and Ryan Dubé at ryan.dube@wsj.com